The main equity indexes gapped up on Thursday despite another hotter-than-forecast inflation report, this time on the producer side, as President Donald Trump continued to share updates on negotiations with Iran via social media. Stocks held their gains through the trading session and surged late, with investors, traders and speculators apparently poised for whatever comes next in the Middle East, be it more war or real peace.
By the closing bell, the blue-chip Dow Jones Industrial Average was up 1.9% at 50,848, the broad-based S&P 500 was higher by 1.8% at 7,394, and the tech-heavy Nasdaq Composite had added 2.5% at 25,809.
The front-month West Texas Intermediate crude oil futures contract declined from an intraday high of $93.64 per barrel and closed down more than 4% at $86.42 after the president walked back a threat to strike Iran “VERY HARD” on Thursday night and take “total control” of its oil and gas assets.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
“Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved,” Trump posted on Truth Social, “I have, as President of the United States of America, cancelled the scheduled strikes and bombings against Iran this evening.”
PPI is hot, too
Before the opening bell, the Bureau of Labor Statistics (BLS) said the Producer Price Index (PPI) accelerated in May to its fastest annual pace, 6.5%, since November 2022, when the headline print was 7.4%.
The data on producer prices follows Wednesday’s hotter-than-expected May Consumer Price Index (CPI) numbers. Wholesale inflation was 1.1% in May, consistent with the revised estimate for April.
According to the BLS, “Nearly 80 percent of the May advance in final demand prices is attributable to a 2.8-percent increase in the index for final demand goods.”
That category includes energy costs, which increased by 10.7% in May, topping the previous record for a monthly gain of 10.4%, set in March.
BofA double upgrades INTC
Intel (INTC, +9.3%) was among the top-performing S&P 500 stocks on Thursday after BofA Securities analyst Vivek Arya upgraded the chipmaker from Underperform (Sell) to Buy and raised his 12-month target price from $96 to $135.
Arya explains bypassing a Hold rating by noting “higher confidence in INTC’s opportunity to help address industry constraints in leading edge wafers/packaging.”
The analyst also says Intel is well positioned to capture a “much larger” segment of the agentic central processing unit market, with server CPU sales tracking toward 25% of a total addressable market (TAM) of approximately $170 billion by 2030.
Intel’s share of that TAM — about $40 billion — should support earnings per share of $6 by 2030, up from an older estimate of $3 to $4 and vs a profit of 42 cents in 2025 and a loss of 13 cents in 2024.
Wall Street questions Oracle’s guidance
Oracle (ORCL, -8.6%) saw steep downside on Thursday after management reported expectations-beating top- and bottom-line results for its fiscal fourth quarter, but guided to higher capex and softer revenue than Wall Street anticipated. Multiple analysts suggest the sell-off is a buying opportunity in one of the artificial intelligence stocks that’s booming right now.
Indeed, ORCL was down double-digits in aftermarket trading immediately following its post-closing-bell report on Wednesday “for no apparently good reason,” according to Guggenheim analyst John DiFucci.
“We view these results as validation of Oracle as our Best Idea based on superior technology enabling it to provide better performance at a lower price in a burgeoning hyper growth market,” the analyst writes, “which should eventually turn into a cash flow waterfall.” DiFucci has a Buy rating and a $400 12-month target price on ORCL stock.
D.A. Davidson analyst Gil Luria reiterated his Buy rating and raised his 12-month target price on ORCL from $200 to $225. “Oracle continues to deliver infrastructure at an accelerating pace,” Luria observes, “with management highlighting expectations for F1Q27 delivery approaching 1 gigawatt, nearly the same capacity delivered in the prior four quarters combined.”
Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that’s delivered straight to your inbox at the close of each trading day.
At the same time, while reiterating his Outperform (Buy) rating and lowering his 12-month target price from $275 to $240, Wedbush analyst Dan Ives expressed some caution because of Oracle’s growing debt, despite strong growth in remaining performance obligations (RPO).
As Ives explains, “Adding more debt to the capital structure is not a move the Street wants to see and continues to create this ‘tug of war’ on the name between RPO and the necessary capital raises/AI datacenter buildout in the near-term.”